A common trademark enforcement strategy is to start a proceeding before the Trademark Trial and Appeal Board, and then suspend it in favor of a lawsuit in a United States District Court. There are a few reasons for doing this, but one reason is because the district court will consider the real world marketplace whereas the TTAB will rely on presumptions that only exist in registration world. But if the Trademark Office does not have to follow the district court’s decision, it calls into question the viability of this enforcement strategy going forward.
FCA US LLC filed an application to register the mark MOAB in standard characters for “Motor vehicles, namely, passenger automobiles, their structural parts, trim and badges,” in International Class 12. The Trademark Office refused registration on the ground that the MOAB mark was likely to cause confusion with the registered mark MOAB INDUSTRIES for “Automotive conversion services, namely, installing specialty automotive equipment,” in International Class 37. FCA US petitioned to cancel the MOAB INDUSTRIES registration and Moab Industries sued FCA in district court for infringement.
A lot of suspensions then took place. The Examining Attorney suspended further examination of the MOAB application pending the disposition of the cancellation proceeding, and then the TTAB suspended the cancellation proceeding pending the disposition of the lawsuit. The district court found there was no likelihood of confusion and dismissed Moab Industries lawsuit. The parties stipulated to dismissing the cancellation proceeding without prejudice. Thereafter, the Examining Attorney resumed examination of the MOAB application and issued a final office action refusing registration of the MOAB on likelihood of confusion grounds, which FCA US appealed.
On appeal, FCA US argued that the trademark office was prevented from maintaining its refusal on likelihood of confusion grounds because the district court found there was no likelihood of confusion. The TTAB held that the issues before the trademark office were broader than the issues decided by the district court. For example, the district court decided the confusion issue on a very specific type of vehicle whereas the application sought protection of the MOAB mark for the broad description “passenger automobiles.” Because the district court considered the very thing it is required to consider (i.e., the real world marketplace) its decision on confusion did not bind the Trademark Office.
The interesting aspect of this case is that FCA US has the option of appealing the TTAB’s decision back to District Court where the court will consider new evidence demonstrating no likelihood of confusion. And because the Lanham Act specifically grants the District Courts the authority to determine the right to registration, TTAB’s reliance on the presumptions that exist in registration world only may again give way to the marketplace reality, which was already decided by a District Court. The unfortunate thing for FCA US is that if it goes down this road, it will have to pay the government’s attorneys’ fees and costs whether it wins or loses.
As searchers, what can we learn from this case? It is important to search the USPTO because the actual services being offered or goods being sold may be in sufficient to avoid a likelihood of confusion.